Law:

Section:

Section 147 of the Income-tax Act, 1961 [Corresponding to section 34(1) of Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment year 1954-55 - At time of original assessment facts that a raid had been conducted by police at assesse's premises wherein certain books of account were seized and that police found certain envelopes which contained cash and explanation in regard to same was not property given by assessee, were within knowledge of ITO - Subsequently, ITO without any further material initiated proceedings under section 34(1)(a) of 1922 Act and included aforesaid amount in income of assessee - Tribunal held that there had been no escapement on account of any non-disclose or concealment by assessee and therefore, proceeding under section 34(1)(a) of 1922 were invalid - Whether finding of Tribunal was in way erroneous, much less perverse. - Held, no FACTS The original assessment of the assessee company was completed. Subsequently, the ITO without any further materials initiated proceedings under section 34(1)(a) of the 1922 Act and issued a letter to the assessee drawing its attention to the police raid on the 30-8-1953, and the discovery of the sum in an iron safe belonging to the mill and asked the assessee to show cause why penal proceedings should not be initiated for deliberately furnishing inaccurate particulars and for making a false statement. The assessee offered an explanation which was not accepted by the ITO and by an order dated 30-11-1962, the assessee was reassessed under section 34(1)(a) read with section 23(3) of the 1922 Act and the aforesaid sum was included in the income of the assessee. Proceedings under section 271(1)(c) of the 1961 Act, were also started for levying penalty against the assessee after obtaining the approval of the IAC. The AAC affirmed the order of the ITO. The Tribunal held that the contention raised on behalf of the assessee regarding the initiation of the proceeding being without jurisdiction was well founded as the material facts on record relating to the said amount were within the knowledge of the ITO before the completion of the original assessment proceedings. The Tribunal further…

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